EBK ESSENTIALS OF ECONOMICS
4th Edition
ISBN: 8220103647380
Author: KRUGMAN
Publisher: MAC HIGHER
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Chapter P2, Problem 1.3BC
To determine
Impact on taxi rides due to increase in prices.
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Your Best Brand Bike Shorts - BBB Shorts have been flying off the shelf. Your chief economist tells you that during the Covid-19 pandemic, "the taste for bicycling has changed. The price
elasticity of demand is much more inelastic. The price elasticity of demand has decreased from -5.76 to -2.70."
Before the campaign, your price was $240 per pair of BBB Shorts. What should the new price be?
Please enter the new price here: $ [a] Show only your answer in the box. Do not include steps in the box and do not add the dollar sign.
Suppose the demand for parking at campus is given by P - 5 -0.02Q. where Pis the price in dollars and
Qis the quantity demanded.
Suppose the current price is $2.50, if the goal is to increase total revenue, would you recommend
increasing the price of parking from $2.50 to $3.00? Briefly (in a sentence or two) explain your
answer.
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Assume that you work in a movie theater and you want to increase revenue at the theater after the pandemic. The pandemic has caused people to find many activities that are alternatives to going to the movie theater. Fill in the blanks below with the words that best complete the sentences:
Because consumers have found more substitutes for going to the movie theater, price elasticity of demand for movie tickets is more likely to be
[ elastic or inelastic ].
Because of this price elasticity of demand, you should [increase or decrease] the price of movie tickets if you want to increase revenue.
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- Answer in step by step with explanation. Don't use Ai and chatgpt.arrow_forwardWhich is more elastic sugar or salt? Reasonarrow_forwardPART II: IS UBER A NORMAL OR INFERIOR GOOD?IS UBER A NORMAL OR INFERIOR GOOD?From the question above provide 2 Reasons why you are arguing whether Uber is a normal or inferior – briefly rationalize why using concepts related to income elasticity.arrow_forward
- The subway fare in your town has just been increased from 50 cents to $1.00 per ride. As a result, the transit authority notes a decline in ridership of 60 percent. What is the price elasticity of demand for subway rides?arrow_forwardShow it.... The State government is considering building a new highway. Linda lives near the proposed highway. Her demand for trips per month is given by Q = 60 - 0.5P, where Q is the number of trips and P is the average cost per trip in cents. The current average cost per trip is 60 cents, and the new highway is expected to reduce it to 40 cents. A legislator asks Linda how much she is willing to pay per month for the construction of the new highway. Linda: I am making 30 trips now when it costs me $0.60 per trip. With the new highway, the cost will be reduced to $0.40, so I am willing to pay up to 30 (0.6 - 0.4) = $6 per month. Do you agree with her reasoning?arrow_forwardTwo drivers-Kevin and Maria-each drive up to a gas station. Before looking at the price, each places an order. Kevin says, "I'd like 10 gallons of gas." Maria says, "I'd like $10 worth of gas." Who's statement is elastic?arrow_forward
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